Repairing DNA double-strand breaks is crucial for maintaining genome integrity, which occurs primarily through homologous recombination (HR) in Saccharomyces cerevisiae. Nucleosomes, composed of DNA wrapped around a histone octamer, present a natural barrier to end resection to initiate HR, but the impact on the downstream HR steps of homology search, DNA strand invasion, and repair synthesis remain to be determined. Displacement loops (D-loops) play a pivotal role in HR, yet the influence of chromatin dynamics on D-loop metabolism remains unclear. Using the physical D-loop capture and D-loop extension (DLE) assays to track HR intermediates, we employed genetic analysis to reveal that H2B mono-ubiquitylation (H2Bubi) affects multiple steps during HR repair. We infer that H2Bubi modulates chromatin structure, not only promoting histone degradation for nascent D-loop formation but also stabilizing extended D-loops through nucleosome assembly. Furthermore, H2Bubi regulates DNA resection via Rad9 recruitment to suppress a feedback control mechanism that dampens D-loop formation and DLE at hyper-resected ends. Through physical and genetic assays to determine repair outcomes, we demonstrate that H2Bubi plays a crucial role in preventing break-induced replication and thus promoting genomic stability.